Economic growth stabilizing amid transformation

The first half-year economic data released by the National Bureau of Statistics (NBS) last Wednesday showed that the economy is in a reasonable range and on a steady recovery trend. Both of the first two quarters maintained a GDP growth rate of 7 percent year-on-year, which was better than expected.

Second-quarter momentum mainly came from the tertiary industry whose share in the total industrial sector grew to 8.4 percent from 7.95 percent in the first quarter, partly owing to the rebound in the real estate and financial markets.

Based on the contribution to cumulative year-on-year GDP growth, the secondary industry is still quite important in China's economy, taking 37.91 percent on average - from first quarter in 2013 (41.4 percent) to second quarter this year (33.6 percent).

Meanwhile, the financial industry contributed a lot in the first and second quarter of this year. But things will be different in the second half of 2015, as the stock market has fallen sharply since June 15 with the ensuing IPO suspension by the China Securities Regulatory Commission.

Among provinces that have released regional GDP growth data, 20 registered a better result in the first half-year than the first quarter, notably in western regions such as Sichuan and Xinjiang.

The amazing GDP growth of Xinjiang and Hainan, with a rate higher than the national average of 7 percent, may indicate China's Silk Road Economic Belt strategy is actually starting to pay off by stimulating the country's economic growth.

While these provinces recorded huge growth, they in total only accounted for 14 percent of total change in national GDP growth compared to the last quarter.

Zhang Shuyu is an assistant professor at School of Banking and Finance at University of International Business and Economics, and Yan Xiaolong is an investment manager at China Life Investment Holding Co Ltd. The views do not necessarily reflect those of China Daily.